Snyder on mark to buy Redskins

Cooke withdraws bid

$800M offer likely to be approved by NFL

April 23, 1999|By Vito Stellino | Vito Stellino,SUN STAFF

With Maryland businessman Daniel Snyder poised to complete a deal to buy the Washington Redskins for $800 million, John Kent Cooke withdrew his offer yesterday to buy the team his father owned when he died two years ago.

Snyder, who was a minority partner in Howard Milstein's unsuccessful bid to buy the team, is now negotiating with the trustees of Cooke's estate to buy the team as the lead partner.

While Milstein's $800 million bid was rejected because he wasn't putting any cash in the deal and had a contentious relationship with league officials and owners, Snyder is putting up $150 million in cash in the deal and has remained on good terms with the owners. He was willing to put up $50 million in cash as a minority partner.

According to a league source, the owners are likely to approve the Snyder bid, possibly as early as their meeting in Atlanta May 25-26.

Snyder, who would become the youngest owner in the NFL at age 34, built Snyder Communications into a global, multimedia marketing empire.

Snyder's partners include New York publishing executives Mortimer Zuckerman and Fred Drasner, both directors of Snyder Communications.

Sources close to the negotiations said the deal could be completed in a matter of days and Cooke's public statement of withdrawal was a sign that he no longer believes he can keep the team in the Cooke family.

After saying he had greatly increased his offer (apparently from $680 million to $720 million), Cooke said in a statement: "The executors failed to act on my offer and today I have withdrawn it. I refuse to be used merely to increase the bids of others, since it is well known that I have always wanted to keep the Redskins within the family."

Cooke said his offer "reflected today's fair market value" of the Redskins.

Peter Angelos, the Orioles owner who withdrew from the first round of bidding at $625 million, thinks Cooke was above market value and declined to go much higher than he did the first time.

"As I've said previously, the numbers [$800 million] just don't add up. We bid $625 million last time and I think you can justify that, maybe somewhat more. Obviously, I'm not an authority on the subject, but I don't think the team is worth $700 million, certainly not $800 million. To the successful bidder, I wish him well," Angelos said.

The only other serious bidder appears to be Arizona developer Sam Grossman, who has Federal Express chairman Fred Smith, who once attempted to get an expansion team for Memphis, in his group. But Grossman also appears to be willing to pay $800 million.

It's likely to take him years to make any money on his investment in the Redskins, but the Bethesda businessman grew up in Washington as a Redskins fan. He said owning the Redskins is a "dream come true."

Snyder recently denied he was willing to pay more than the team is worth simply because he's a fan.

"I would never call this a vanity purchase," he told BusinessWeek. "I would call this a once-in-a-lifetime opportunity."

The purchase price will easily top the previous record price of $530 million paid by banker Al Lerner for the Cleveland Browns. The actual price for that team was $476 million, with $54 million in stadium costs included in the deal.

The Redskins are worth more than the Browns because they have 208 luxury boxes and 15,000 club seats -- double the number in most stadiums -- and gross about $140 million a year.

Snyder and his group will put up $600 million and pick up $200 million in debt, mostly on the stadium. They'll also get close to $50 million that are in the team coffers.

Snyder will be able to increase revenues by selling the name ofthe stadium and packing more suites and club seats into the stadium.

Snyder is expected to have an easier time than Milstein did of getting the necessary 24 votes for approval. Milstein withdrew on April 7 when he saw he could notget the votes and the owners promised to return the $30 million non-refundable deposit he had paid the trustees.

Snyder has maintained a solid relationship with the owners. He said at a news conference at aMarch meeting in Phoenix that the process had been fair. Cooke's withdrawal makes it easier forSnyder to be approved.

When Jack Kent Cooke died two years ago, he left his son only 10 percent of the estate and stipulated that the rest be sold to start a foundation that would, among other things, provide scholarships for college students.

Jack Kent Cooke may not have realized that franchise values would skyrocket in the two years after his death, making it impossible for his son to match the highest bid. Cooke will get 10 percent of the purchase price -- $80 million -- because he was left 10 percent of the estate.